Music Licensing and Resolution of Music Publishing Disputes

On October 25, the US Copyright Office published a Notice of Proposed Rulemaking (NPRM) in the Federal Register that clarifies the application of an exception to derivative works from cancellation of copyrights administered under the Music Modernization Act (MMA). The office wants to rectify what it considers a legally flawed dispute resolution policy established by the Mechanical Licensing Group (MLC), which governs MMA’s general license to digital music providers, and which includes songwriters exercising their rights to termination to claim royalties then pay royalties in exchange for royalties owned by a music publisher.

The Music Modernization Act (MMA) updated copyright law to make statutory licensing fairer for creators and more efficient for digital music providers. It is divided into three major chapters, as shown below: 

•  Title I – Modernization of Musical Composition Law; 
•  Title II – Classic conservation and access law; and 
•  Title III – Music Producers Incentives Act.

Title I establishes a general licensing regime that allows digital music providers to create and distribute digital sound recordings (for example, permanent download, limited download, or interactive broadcast). 

Title II brings portions of sound recordings made before 1972 into the federal copyright system and provides federal remedies for the unauthorized use of sound recordings made before February 15, 1972. 

Title III allows music producers, sound mixers, and sound engineers to collect royalties received from audio recordings by rationing the process of allowing a certain group (audio exchange) to distribute these copyrights on the basis of “guide letters.”

The Copyright Office has designated the Mechanical Licensing Collective (MLC) to collect and distribute mechanical royalties under Title I of the MMA. Beginning January 1, 2021, composers and music publishers must register with MLC through an online claims portal to receive royalty payments under the new Universal License. 

To implement these regulations, the office has also issued regulations, conducted a policy study, conducted dozens of awareness campaigns, and issued educational materials. 

Once established, Sethimaz will establish and operate a process by which copyright holders can claim ownership of (and participate in) musical works. Once a specific owner of the work has been identified and located in accordance with our established procedures, MLC’s database of musical acts and other recordings will be updated accordingly. The MLC Dispute Resolution Committee will implement policies and procedures to resolve disputes regarding the ownership of licensed musical works.